Rates Traders Unconvinced of September Liftoff

Very few rates traders are convinced that next week is the start of liftoff for Fed Funds rates.

Here’s Bank of America Merrill Lynch’s rates strategist Shyam Rajan on the disbelief of those who put their money where their mouths are:

Much discussed, little priced in
The rates market remains remarkably unconvinced of a September hike despite the recent bounce in risk assets. At current levels, the market is pricing in a 30% chance of a September hike, one full hike this year and about 2.5hikes in 2016. Looking at history, the first Eurodollar contract was pricing in a 100% chance of a hike one week before the June 1999 meetings, while in 2004 a 100% chance of two hikes was priced in one week before (September 2004 contract had two live meetings ahead- June and August ). So although, we have been discussing the first hike for a long time, this is the least convinced the market has been about it for a while.


The myth of a dovish hike
Bank of America Merrill Lynch – September 9th 2015

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. click here commented on Sep 14

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2015/09/10/rates-traders-unconvinced-of-september-liftoff/ […]